Natural rubber stocks are smaller than estimated and the new chief executive of the International Rubber Consortium warned that with production falling, a shortage could be looming.
“The market’s perception of high-level rubber stock, particularly at producing countries, needs to be corrected,” said Salmiah Ahmad, chief executive of the body that encompasses 70% of the world’s production of the commodity. “Our analysis is that we don’t have as much stock as other organizations say we do…there are discrepancies,” she said.
“The decrease of natural rubber production…particularly the production in Thailand and India, would lead to a possible global natural rubber shortage in 2015,” Ms. Salmiah said.
Prices are likely to gradually improve over the remainder of the year due to the Association of Natural Rubber Producing Countries–comprised of 11 countries that produce around 92% of the world’s natural rubber–keeping year-over-year production unchanged or even reducing it, said Ms. Salmiah, who added that a steadier global economy would also likely help.